The Great Britain pound strengthened today on the speculation that the higher than expected inflation and the retail sales would cause the central bank to raise the interest rates.
The annual inflation was at 3.2 percent level in June, which is lower than May reading of 3.4 percent, but still above the central bank’s limit of 3 percent. The survey, performed by the British Retail Consortium, showed the 1.2 percent increase of the retail sales. This data created an upward pressure for the sterling, boosting the currency.
The Bank of England was keeping the interest rates at the record low level and tried to maintain the economic stimulus in order to ease the negative effect of the budget cuts on the economy. The inflation may cause the bank to increase the rates, though, driving the pound further up.
GBP/USD traded at 1.5179 as of 22:37 GMT today after it opened at 1.5030. GBP/JPY traded near 134.77 down from the opening rate of 133.18.
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